Eurozone inflation sees surprise rise

Annual inflation in the eurozone rose to seven percent in April, the EU’s statistics agency said Tuesday, the first increase after five consecutive months of declines.

Consumer prices edged up from 6.9 percent in March, which could further encourage the European Central Bank (ECB) to raise interest rates on Thursday. Analysts for FactSet and Bloomberg had predicted the rate would remain stable.

The ECB has hiked rates repeatedly since July last year to rein in red-hot inflation, and analysts expect the Frankfurt-based institution to raise them again, though they are divided on how big the increase will be. Following Russia’s assault on Ukraine last year, energy prices soared and helped push consumer prices higher across the single currency area, hitting a peak of 10.6 percent in October.

Inflation later fell thanks to a slowdown in the rate of energy price rises, but it still remains well above the ECB’s two-percent target. Food and drink prices keep climbing, putting pressure on European households, but the pace of the increase slowed to 13.6 percent in April after 15.5 percent in March, Eurostat said.